Giving kids a budget is not just child’s play
Did you have to tidy your bedroom or do the washing up to earn pocket money?
While many adults have memories of scrubbing pans or vacuuming to get weekly handouts from their parents, it seems many children nowadays do not have much experience of “earning” cash.
One in four parents of under-12s does not give them pocket money or financial rewards for carrying out household chores, according to new research.
The survey, from the Financial Services Compensation Scheme, reveals that only 50% of parents pay their child regular pocket money.
And many of those who do give their children regular handouts do not give them free rein to spend the cash how they like.
More than half (54%) of parents who provide pocket money are concerned their child would simply buy chocolate and sweets if they could spend the money as they wished, while more than a third (37%) say their child would buy something they don’t really need.
Yet, as with setting youngsters chores so they can earn their pocket money, allowing your child to have a small amount of money to spend how they like – even if this leads to them making mistakes – can help them build experience of handling money.
They may even avoid making bigger financial mistakes when they’re older as a result.
Nearly a third (31%) of parents say they tend to influence what their kids buy with their pocket
money and 24% encourage them to save for a larger purchase.
But nearly four-fifths (79%) of parents agree that if children handle money from a young age, it helps them learn and appreciate its value.
Mark Oakes, head of communications at the FSCS, which protects savers if their bank or building society goes bust, says: “It is a parent’s choice how they want to get their child thinking about money, but giving them a little sum of their own to manage is a great way to start.
“They aren’t going to get it right every time, but children need to be given the opportunity to make their own mistakes.”